NEED
TO KNOW - MORTGAGE INFORMATION

Offer: indication by a potential buyer of a willingness
to purchase a home at a specific price; generally put forth in writing.

Origination: the process of preparing, submitting, and
evaluating a loan application; generally includes a credit check, verification
of employment, and a property appraisal.

Origination fee: the charge for originating a loan;
is usually calculated in the form of points and paid at closing.

P

Partial Claim: a loss mitigation option offered by the
FHA that allows a borrower, with help from a lender, to get an interest-free
loan from HUD to bring their mortgage payments up to date.

PITI: Principal, Interest, Taxes, and Insurance - the
four elements of a monthly mortgage payment; payments of principal and
interest go directly towards repaying the loan while the portion that
covers taxes and insurance (homeowner's and mortgage, if applicable) goes
into an escrow account to cover the fees when they are due.

PMI: Private Mortgage Insurance; privately-owned companies
that offer standard and special affordable mortgage insurance programs
for qualified borrowers with down payments of less than 20% of a purchase
price.

Pre-approve: lender commits to lend to a potential borrower;
commitment remains as long as the borrower still meets the qualification
requirements at the time of purchase.

Pre-foreclosure sale: allows a defaulting borrower to
sell the mortgaged property to satisfy the loan and avoid foreclosure.

Pre-qualify: a lender informally determines the maximum
amount an individual is eligible to borrow.

Premium: an amount paid on a regular schedule by a policyholder
that maintains insurance coverage.

Prepayment: payment of the mortgage loan before the
scheduled due date; may be Subject to a prepayment penalty.

Principal: the amount borrowed from a lender; doesn't
include interest or additional fees.